Warrior Trading Blog

Aug 1st, No Trades! I exercised patience today!

no trades

Aug 1st, No Trades! I exercised patience today!



All right, guys. We’re going to do our midday market recap, go over the lack of trades for today. This is very unusual. I’m not sure that there’s been a day this year that I came into the office, sat here, and tried to trade and didn’t find a single setup worth trading. It’s unusual partly because on days where we don’t have a lot of price action I often end up saying, “Well, I’ll take this trade.” Even though it’s not an A quality setup, I’m like, “Eh, I’ll take this one, or I’ll take that one.” Often, those are the days where I lose money. It’s better to, of course, be break even than red.

I’m just looking at my calendar here. No days in January, no days in February, no days in March, no days in April, no days in May that I came in, sat down to trade, and didn’t find anything to trade. Let’s see. Yeah, very unusual. I see a Monday here, Monday the 15th. Now, I’m not sure about that one. I think this is the first day this year. It’s possible that there’s a second day in there somewhere.

Why is that? Let’s look at the gap scanner, the watch list from this morning, and why I decided not to trade some of the stocks that were on my watch list. First stock on the watch list was TDW. This one, only 1,200 shares of volume was not something I was interested in. Honestly, I’m not really sure what the story is with this one but I didn’t touch it. I just left it alone. That one was off the list.

Next one, CBMX. CBMX is a merger. A lot of times, when you have a stock that’s a merger, it ends up trading pretty much sideways at the price of the merger. Not a lot of volatility here, not a lot of opportunity, so no trades on that one. Next one down, LL, Lumber Liquidators. $30 stock, outside my wheelhouse, no trades there.

Next one down, SKLN. This is the first one that I had on my watch list, and I thought it looked pretty good. You can see the pre-market chart here. The pre-market chart was looking good until the red candle right before the open. That red candle there as we kind of dropped down was where I was a little bit worried because it was starting to show a bit of weakness.

So then, when the bell rang, I was like, “Well, do I really want to get into this?” I’m looking at the level 2 and I’m seeing that the high of that first candle … Actually, even before that candle closed, the price was like $1.81 by $1.85. It popped up to 90, it pulled back, and I was like, “Well, maybe I’ll get in over $1.90.” That’s what I said to myself. I was like, “I might get in this over $1.90.”

I had my order ready to go for, I think it was 3,000 shares. I was going to take 3,000 and then if it looked good, double to 6,000, maybe go up to 9,000 if it was really strong. I was watching it $1.90, and it pops up to $1.90 then drops down to 83 and I was like, “You know what, this is the first day of the month. I really don’t want to take a $600 loss right out of the gates.”

And what happened yesterday. Yesterday my very first trade of the day was a $400 loss, just instant in the red. I didn’t want that to happen again today, so I was like, “All right, you know what, I’m just going to play this a little bit safe. If it pops up, if it shows strength, then I can always get in on the first pullback.” It ended up popping up to 94, hitting $2.05, squeezing all the way up to $2.13, and then coming all the way back down to $1.87.

It didn’t give us a first one-minute pullback. It ended up kind of just taking off and then if you didn’t get in, basically … Where were your entries? You had a possible entry at $1.90, which I called out in the room. I was like, “I think some traders will buy it here at $1.90.” Stop is low of day. I’m a little unsure about it, and I’m unsure because the pre-market chart is not ideal.

Second entry could’ve been an entry at $2. It hit $2, popped up to $2.03, $2.05, dropped down below $2 for a second, and then it popped up again. Third entry could’ve been over $2.05 for a scalp up to $2.13. You had some scalp opportunities, and I know that some of you guys ended up trading those and making some money on them, so great job for doing that. I was a little iffy on it. I didn’t think it was an A quality setup.

If I felt like being more aggressive, I could’ve gone in for quick scalps, but it really just would’ve been like five cents. Basically, I want to find the potential to get like 25, 30 cents of profit out of the market. On this one, I felt like best case scenario was only five or 10 cents. Maybe I could’ve gotten 15. I may have been able to do a little better on it, but I didn’t feel it. I was not sure about it.

Since we’re at the beginning of the month, I really don’t want to start the month by having a big setback, and even a small setback. I don’t want to go red. I just want to go right into the green, and that means getting off to a good start. I was like, “SKLN, I’m not sure about it. I’ll just wait till the next one. Fair enough.”

Next one on the watch list was MBRX. MBRX I was a little unsure about because the last few days that we tried to trade it back here on the daily chart when it was coming up and tapping the 200 moving average, it was choppy and I lost money on it both times I tried to trade it. So I was like, “All right, this stock has a history of being a little choppy. I’m not sure if it’s going to be easy to trade.”

I noticed right into the close it squeezed up from $2.61 up to $3. This one, sometimes when you see that you kind of wonder what created that little squeeze. I was just a little skeptical on it. Pre-market hit a high of $3.08, and then the bell rings. We already have a pre-market … Sorry. Pre-market high was $3.04, and then we pulled back. We opened right under 3, and I was thinking, I was like, “You know what, this is tempting. I could get in this right at $3 for the whole dollar break.”

I noticed a decent sized bid, but I also noticed some big sellers on the ask, like 30,000 share sellers. I was like, “I don’t know, this seems like it might be a little too thickly traded. I’m not sure about it. The float on this one may be a little on the higher side.” I don’t see it on my gap scanner, but in any case, I just wasn’t sure. It pops up to $3.05 or $3.08, does a little one-minute micro pullback there. Actually, it doesn’t really. It just goes to $3.08 and then to $3.09, then up to $3.10, up to $3.13, up to $3.18, $3.23, and then it pulls back.

So I was like, okay … Again, this ended up giving us potentially 20 cents of profit. I saw some of you guys jumped in at $3 or jumped in at $3.10, scalped it, made some money on it. I just was a little unsure about it. It pulls back here under $3.23, and at that point I was like, “Well, I’m not sure I really like it.” On the five-minute you can see how we have this little Doji candle, we’re extended off our nine moving average.

The high was 23, so where would I get in? I can get in at $3.20, and what’s my target? $3.23. That’s only three cents. You could see how it had quickly been dropping down to $3.15 and showing $3.12 on the bid. Made me think, “If it drops, it could roll over quickly.” Sorry, guys. I was just like, “I don’t know, I’m not feeling it.” It pops up to a high of $3.28, again, like eight cents. Then it drops right back down to $3.16. So choppy, not clean. Could I have traded it? Could I have scalped it? I could’ve. Quick in, quick out, 3,000 shares, 4,000 shares. I could’ve been more aggressive on it, but I just wasn’t feeling it. I just wasn’t sure on that.

That was MBRX and SKLN, and those are the only two I had on watch. So then I say, “Okay. Well, neither of those play out and at this point it’s like 9:45.” If it’s 9:45 and I haven’t taken a trade yet, that’s already very unusual because usually I trade in the first 15 minutes almost every single day, and I’m trading off my watch list. I was like, “Okay, obviously something’s different today. I’m not seeing clean momentum, but let’s watch the high of day momo scanner. We’ll see if something pops up.” Let me pull up the scan here for the high of day momo scanner, historical scan from this morning.

All right, and you’ll see SKLN was hitting the scanner. That was kind of like, oops. That was sort of the first thing to hit the scanner. Obviously it was popping up a little bit, 86, 88. SKLN, CBMX, that was a merger so not going to trade that one. ACRX, 35 million share float. Wasn’t super interested in that one. LL, Lumber Liquidators, too expensive. MBRX I was watching, didn’t feel comfortable on. AXTI, didn’t feel that one. Not the right price range. RAVE, very light volume.

That was just kind of it. RAVE popped up a little bit here, but I felt like the volume on that one was too light. I couldn’t really trust it, only 100,000 shares of volume. You can look at the chart here. It’s almost hard to even read it because it’s just sort of sporadic. Today was a day where we just didn’t have a lot of opportunities, and you’ve got two choices. You either lower your quality standard so you can take some trades, or you say, “You know what, I’m not feeling it. I’m not going to trade today.”

Today was, I don’t even know if I would consider this, from my records … From my trading records, yesterday was the 139th day of the year, but days where I’m out of the office I don’t count them. I was in the office today, I just didn’t trade. We’re doing a recap, so I guess today’s the 140th day of the year. No trades. No good setups. That’s fine. It doesn’t really matter either way. I came here looking for good opportunities, didn’t see one, didn’t overtrade, didn’t force anything, and that’s good. I’m not starting the month in the red. That’s the important thing.

Hopefully we see some good opportunities tomorrow going into Wednesday and Thursday, things start to slow down. We’ll see. Maybe this is going to be maybe a little bit of a slow start to the month. It’s been a strange couple of months of trading where we haven’t seen the same level of follow-through that we were seeing at the very beginning of the year in January and February, or even last year.

No rhyme or reason, just we haven’t for whatever reason seen a stock that had that catalyst, had that A quality, perfect storm that allowed it to go from $2 to $10 or $15. I don’t really know what it is exactly. It just seems like we haven’t had those good headlines, those good catalysts. We’ll get it. It’s just a matter of time, and in the mean time, when we have decent setups, be able to scalp the way to the daily goal, $500 here, $500 there, $1,000 daily goal.

Yesterday was a great day. 3,000 bucks. Today, no trades. So I’m averaging $1,500 a day this week in two days, so that’s fine. Hopefully we’ll be able to keep up that average. I would like to hit $5,000 on the week. That means $2,000 sometime between tomorrow and Friday. If I do $1,000 on Wednesday, $1,000 on Thursday, I can take the day off on Friday. But we’ll just see what the market gives us.

Hopefully we have some good opportunities, but definitely going to stay focused with the beginning of the month. This is the time to start with a clean slate, reflect on what you did right, what you did wrong in July, and now here for August create a new set of rules, so what you’re going to do to improve your metrics and be a slightly better trader.

Okay, so that’s our recap for today. At 3 pm Eastern, we’re going to have our Warrior Pro mentor session for beginner Warrior Pro students. That’s 3 pm Eastern today, and then we’ll be back at it first thing tomorrow morning. All right, so just going to put that down on my calendar, and I will see you all right back here in the chat room tomorrow morning. Okay, thanks guys. See you then. Oh, yesterday was 7,500 shares on NOVN and 2,000 shares on MYO, so only two trades yesterday.

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